Cloud computing delivers software and IT infrastructure services via a shared network. The global cloud market will grow at a compound annual growth rate of 26.2%, increasing from $37.8 billion in 2010 to $121.1 billion by 2015. Looking at the growth opportunities in cloud technology, software companies are combining cloud technology with existing applications as well as new ones. With the prevailing growth opportunities in this industry, here is analysis of three companies that are looking to grow further and enhance their market share by signing agreements and acquiring other cloud-computing companies. Let’s discuss how these companies will gain investor confidence with their cloud businesses.
Acquisition enhancing digital marketing revenue
To enhance its digital marketing segment capabilities, Adobe Systems Incorporated (NASDAQ:ADBE) recently acquiredNeolane, a leader in cross-channel campaign management technology, for $600 million. Neolane has software that helps in tracking and integrating an enterprise’s online and offline marketing efforts across all channels. This acquisition will generate strong marketing automation capabilities for Adobe Systems Incorporated (NASDAQ:ADBE)’s cloud marketing suite and will increase the company’s cross-channel campaign management capabilities.
Neolane, with 400 international clients, generated revenue of $58 million in 2012 and expects revenue of $100 million this year. Adobe Systems Incorporated (NASDAQ:ADBE) reported 17% growth year-over-year in its digital marketing cloud revenue, earning $229.6 million in the second quarter of 2013. It expects digital marketing cloud revenue of $1.19 billion this fiscal year and $1.32 billion next year, up from $1.09 billion last year.
Adobe Systems Incorporated (NASDAQ:ADBE)’s creative software products such as Photoshop had a global market share of around 43% in 2012. To enhance its market share, the company is launching new software every 18 months. On the other side, the increased competition from open source alternatives and the new Internet-based subscription model priced lower than the traditional model, forced it to reduce its software subscription price to $792 this year from $870 in 2012.
To grow its market share and revenue, the company launched its next-generation Creative Cloud service with a subscription fee of $49.99 a month. Creative Cloud received an overwhelming response and ended the second quarter with 700,000 paid subscriptions. In order to grow further, Adobe Systems Incorporated (NASDAQ:ADBE) is keeping it up-to-date with the latest features and capabilities by adding new tools in its applications. This will help Adobe Systems Incorporated (NASDAQ:ADBE) retain existing customers and to reach its goal of 1.25 million paid subscriptions by the end of this fiscal year. Total revenue will remain flat this fiscal year and grow to $4.51 billion next fiscal year due to the software’s reduced price, up from $4.4 billion last fiscal year.